Perceptions what is "low" on the VIX (VXX) are skewed by the financial crisis, writes Adam Warner. Prior to 2008, a VIX above 30 for any length of time was unheard of, and a level in the teens was the norm for years on end. This doesn't mean options aren't cheap at these levels - they are, and replacing stock winners with calls at these prices wouldn't be a horrible strategy. [View news story]
Be careful thinking buying VXX is like buying VIX. It is not. Buying VXX is more like buying an insurance policy that VIX will rise. If VIX does not rise expect to pay periodic premiums (VXX will decay over time compared to VIX). The same goes for TVIX, VXY, UVXY, etc.
UVXY: How One Can Profit From This VIX ETF [View article]
Looks like we could see a 30% drop in the VIX. Its drop seems relentless as the S&P slowly creeps up to a 13 year triple top. A 30% drop in the VIX would decimate these VIX etfs, but expose a great buy opportunity.
UVXY: How One Can Profit From This VIX ETF [View article]
I see, so in other words buying one of these is a little bit like buying a call, or an insurance policy. You are mitigating risk by paying a periodic premium. It should kick in a good payout when there is a catastrophic decline of the sp500, but otherwise expect to pay periodic losses.
I'm not sure it is more effective to buy one of these or to use options. The IV on the options is very high. Have you done any comparisons on the most cost effective way to hedge sp500 that you'd be willing to divulge?
UVXY: How One Can Profit From This VIX ETF [View article]
Sadly, these products that claim to track the VIX do not perform well, a pattern evident if you correlate almost any ETF/N with the instrument it is supposed to track over more than a couple of weeks. They almost all have a sort of built in decay. I would not recommend holding them.
UVXY: How One Can Profit From This VIX ETF [View article]
The VIX is a calculation based on the VIX options volatility (CBOE)....1 VIX Futures are a function of VIX expectations....2 UVXY has to do with VIX Futures (your own comment)....3 Therefore, UVXY has to do with VIX.
Thank you for trying not to be a prick, but you do need to read you own post before hitting the reply button.
UVXY: How One Can Profit From This VIX ETF [View article]
I guess we must have turned a corner. UVXY up 15% VIX only 5%. Does this imply the futures are backwardated. Or is this just a spot vx NAV trading spike?
UVXY: How One Can Profit From This VIX ETF [View article]
It's always easy in theory my friend. Obviously, the holy grail of investing would be to "trade the VIX" with no premium. That's why one wants to believe there is a simple way to do it, like buying a "VIX ETF". I think we are saying the same thing. It does not exist. These VIX products are actually not claiming to be that, but to the average retail client they sure look like they are. This is very disappointing to the average retail customer and I fear there will eventually be some fallout.
But we can't let these off that easily. There is more money leaking out of these things than can be accounted for based on the differential between the short term futures and 30 and 60 day futures calculation which constitutes the VIX in the common vernacular. Fees I guess.
If you ever find an ETF that tracks the VIX in the common sense of the word, please let me know, that's all I was asking for.
UVXY: How One Can Profit From This VIX ETF [View article]
"ProShares Ultra VIX Short-Term Futures ETF seeks daily investment results, before fees and expenses, that correspond to two times (2x) the daily performance of the S&P 500 VIX Short-Term Futures Index"
"This Ultra ProShares ETF seeks a return that is 2x the return of an index or other benchmark (target) for a single day, as measured from one NAV calculation to the next. Due to the compounding of daily returns"
I think they achieve these goals for the most part except for the days where they don't. You have to watch out for those days.
UVXY: How One Can Profit From This VIX ETF [View article]
The principal of the ETF is to be able to track any arbitrary index. It is possible, but it is not as lucrative as these schemes. Why is it that people think that if they simply say the word "contango" everyone will believe every word of nonsense. If an ETF/ETN emerges that tracks the VIX please let me know.
UVXY: How One Can Profit From This VIX ETF [View article]
Haha. So is there an ETF out there that tracks the VIX properly? After all, SPY successfully tracks the SPX and DIA the DOW. Is it more lucrative for the banks to provide these failed VIX tracking ETF/ETN's than to provide a legitimate VIX tracking ETF?
UVXY: How One Can Profit From This VIX ETF [View article]
Erick, as I understand it the vix is an index based on a calculation based on the 30 and 60 day futures of the s&p. That's more than just an oscillator, but I sorta kinda see your point. Also you say the VIX is not trade-able. What is one trading when one buys vix options? You would say one is buying options on the oscillator. OK fair enough. So you are also saying UVXY only looks at the front month. Fair enough.
Is there one of these that tracks the VIX oscillator better, because that is what I need.
The Resurrection Of TVIX [View article]
Perceptions what is "low" on the VIX (VXX) are skewed by the financial crisis, writes Adam Warner. Prior to 2008, a VIX above 30 for any length of time was unheard of, and a level in the teens was the norm for years on end. This doesn't mean options aren't cheap at these levels - they are, and replacing stock winners with calls at these prices wouldn't be a horrible strategy. [View news story]
UVXY: How One Can Profit From This VIX ETF [View article]
UVXY: How One Can Profit From This VIX ETF [View article]
UVXY: How One Can Profit From This VIX ETF [View article]
I'm not sure it is more effective to buy one of these or to use options. The IV on the options is very high. Have you done any comparisons on the most cost effective way to hedge sp500 that you'd be willing to divulge?
UVXY: How One Can Profit From This VIX ETF [View article]
UVXY: How One Can Profit From This VIX ETF [View article]
VIX Futures are a function of VIX expectations....2
UVXY has to do with VIX Futures (your own comment)....3
Therefore, UVXY has to do with VIX.
Thank you for trying not to be a prick, but you do need to read you own post before hitting the reply button.
UVXY: How One Can Profit From This VIX ETF [View article]
UVXY: How One Can Profit From This VIX ETF [View article]
But we can't let these off that easily. There is more money leaking out of these things than can be accounted for based on the differential between the short term futures and 30 and 60 day futures calculation which constitutes the VIX in the common vernacular. Fees I guess.
If you ever find an ETF that tracks the VIX in the common sense of the word, please let me know, that's all I was asking for.
UVXY: How One Can Profit From This VIX ETF [View article]
"This Ultra ProShares ETF seeks a return that is 2x the return of an index or other benchmark (target) for a single day, as measured from one NAV calculation to the next. Due to the compounding of daily returns"
I think they achieve these goals for the most part except for the days where they don't. You have to watch out for those days.
UVXY: How One Can Profit From This VIX ETF [View article]
UVXY: How One Can Profit From This VIX ETF [View article]
UVXY: How One Can Profit From This VIX ETF [View article]
UVXY: How One Can Profit From This VIX ETF [View article]
UVXY: How One Can Profit From This VIX ETF [View article]
Is there one of these that tracks the VIX oscillator better, because that is what I need.